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This is a post from Darya our intern at BudgetPulse
It is very important to teach our children imperative money skills. It takes a lot of time to develop good habits the stick. There are many different techniques that parents could use to teach their children about the value of a dollar. Three techniques to look at could be the Jar system, Cell phones and Price comparison.
Jar system:
Each week, give your kids one quarter per age, per week. Organize three jars and the kids can divide between saving, spending and giving/charity. Tell them “They will be required to put at least half in their savings.” They can put it all in there if they choose. Then, match it dollar for dollar. The rest can be spent however they wish. As they grow up, change allowance to one dollar per age, every other week. Change the jars to giving, short-term savings, long-term savings and spending. This way they will start getting used to other vocabulary at an early age. The long-term savings would go into the bank. The short-term savings would be, they could save up for a big-ticket item. Set the kids up with a spreadsheet budget (to go along with their checking account).
Cell phones:
It seems the kids use text messaging more and more as many adults do. However, they need to learn that this act, as any other, holds consequences. Ask the kids pay for their cell phones. As a parent, keep their phone if they cannot pay their monthly cell phone bill.
Price comparison:
If they are looking to buy a name brand product, pick a store brand off the shelf and review the labels. Often, you will find the exact same ingredients in both.
There are multiple other techniques. However, these three are the simplest to implement and hope they will help your family.
What are some tips you use with your kids?
Check out the Saving Spending and Sharing ideas we offer at Moonjar!
@Mary that sounds like a great idea, I will be looking into it more, thanks.
We are starting to teach our children about savings and find it difficult to give out a monetary reward for chores. Right now we are not even telling them they are called chores, but are just part of being in the family. I do talk to my daughter about savings, but since she’s 5 I don’t think she fully understands the concept. When we sit down to talk about her 529 plan she just looks at me and wants to visit another website
Scott @ The Passive Dad’s last blog post..How We Shed $200 From Our Grocery Budget. Next Month FoodMaxx For More Savings
@Scott I don’t blame her for not having interest in something that confusing, I wouldn’t either at her age, not fun to talk about now that I am a little older. Starting small is key. I like the reward system because it is a good way to help motivate someone towards a specific goal. In terms of chores, I like it because it is incentive. If they don’t do chores they don’t get the money, toy, etc.
Since most children lack of financial education, a responsable parent nowadays should take very seriously into consideration this issue.